Payday Loans State Guide

Payday loans are small, short-term loans that should be provided in accordance with state regulations. In the US, states can be classified into three categories depending on the laws that apply to payday loans: restrictive, hybrid, and permissive.

In restrictive states, payday lending is either not allowed or it is restricted by low price caps (usually the 36% APR). Restrictive states are those where payday loans are not authorized, not exempted from state laws on usury, or are prohibited by law. In total, 14 US states fall under this category, as well as the District of Columbia which prohibited payday lending in 2007.

In hybrid states, payday loans are regulated in at least one of the following ways:

With rate caps that are usually lower than in permissive states (normally around 10%);

With limitations in respect to the number of loans per individual (e.g. 8 loans per year);

With several pay periods to repay the loan.

Eight US states can be classified as hybrid.

In permissive states (28), payday regulations are least severe and allow for higher fees and APRs.

What follows is a detailed analysis of regulations in all US states, the District of Columbia, and other US territories.

Arizona

California

Colorado

Maximum Loan Amount: Not more than $500

Maximum Loan Term: No maximum loan term; minimum loan term 6 months

Finance Charges: Payday loan fee may not be greater than 20% for loans up to $300, plus $7.50 of any amount loaned for loans that exceed $300. The lender may also charge an interest rate of 45% per year. If the payday loan is repaid before the due date, the lender must refund a prorated portion of the APR. Monthly maintenance fee may not be greater than $7.50 per $100 loaned or up to $30 per month.

Indiana

Maximum Loan Amount: Not less than $50 and not more than $550

Maximum Loan Term: No upper limit. Minimum loan term is 14 days.

Finance Charges: No more than 15% of the principal for the first $250. For loans between $250 and $400, the charges may not exceed 13% of the amount. For loans between $400 and $500, the charges may not be greater than 10% of the amount.

Maryland

Massachusetts

Michigan

Maximum Loan Amount: $600

Maximum Loan Term: No longer than 31 days

Finance Charges: Payday loan fee may not exceed 15% of the first $100, 14% of the second $100, 13% of the third $100, 12% of the fourth $100, 11% of the fifth $100, and 11% of the sixth $100 loaned. Database verification fee is permitted.

Minnesota

Maximum Loan Amount: $350

Maximum Loan Term: No longer than 30 days

Finance Charges: Payday loan fee may not exceed $5.50 for loans up to $50, 10% plus a $5 administrative fee for loans between $51 and $100, 7% (minimum $10) plus a $5 administrative fee for loans between $101 and $250, 6% (minimum $17.50) plus a $5 administrative fee for loans between $251 and $350. After the due date, the contract rate may not be greater than 2.75% of the remaining amount per month.

Mississippi

Maximum Loan Amount: $500 including the fees

Maximum Loan Term: 30 days for loans under $250; at least 28 but not more than 30 days for loans between $250 and $500

Finance Charges: Payday loan fee may not exceed $20 per $100 loaned for loans under $250 and $21.95 per $100 loaned for loans between $250 and $500. Check-cashing fee may not exceed the greater of 3% of the amount loaned or $5 for checks issued by the government, any county or municipality or any government agency, the greater of 10% of the amount or $5 for personal checks and the greater of 5% or $5 for other checks or money orders.

Pennsylvania

Rhode Island

Maximum Loan Amount: $500

Maximum Loan Term: No maximum; minimum term 13 days

Finance Charges: Payday loan fee may not be greater than 10% of the amount loaned. Check cashing fee may not exceed the greater of 3% of the amount loaned or $5 for checks that constitute payments of state public assistance or federal social security benefit, the greater of 10% of the amount or $5 for personal checks and the greater of 5% or $5 for all other checks.

Texas

Maximum Loan Amount: Not specified

Maximum Loan Term: Not less than 7 days and not more than 31 days

Finance Charges: The lender may not charge more than $1 per $5 loaned for loans up to $30 and for loans between $30 and $100, a fee not greater than 10% may be charged. In the case of installment payday loans, charges may not exceed $3 for loans up to $35, $3.50 for loans between $35 and $70 and $4 for loans greater than $70. For loans greater than $100, acquisition charge may not exceed $10 and installment account handling charge may not exceed $4 per $100 loaned. APRs may range from 83.43% for $350 loans in the duration of 30 days to 569.92% for $100 loans in the duration of 7 days.